Radical Islamism and Jihad (02 Mar 2017 NewAgeIslam.Com)

Pakistan’s Terror-Finance Time-Bomb

By Praveen Swami

March 2, 2017

Days after 26/11, with the threat of an
India-Pakistan war just beginning to recede from the minds of policy-makers,
United States diplomat Bryan Hunt met Pakistani Punjab Chief Minister Shahbaz
Sharif for a leisurely breakfast to discuss the next steps in the war against
terror. Key terror commander Hafiz Muhammad Saeed had been arrested on December
12; the next morning, the portly politician told Hunt that “he intended to
completely shut down the Jama’at-ud-Dawa”. The diplomat was impressed: “The
unwavering attitude displayed by Shahbaz Sharif in shutting down the
Jama’at-ud-Dawa bodes well for the crackdown,” he reported in a classified
cable to the State Department.

Less than a year later, in October 2009,
Saeed walked out of prison — efforts to keep him in jail, other diplomatic
cables record, sabotaged in no small part by Sharif and his brother, now Prime
Minister Nawaz Sharif. The terror commander soon became a key figure in
Pakistan’s Islamist politics. He sought to create a loyal constituency among
the religious right for the army, then besieged by jihadists determined to
overthrow the state.

Now, Saeed is back in detention again —
because no less than Khawaja Asif, Pakistan’s Defence Minister, said at a
conference in Germany last month, that he could “pose a serious threat to
society”. No one knows what that threat is, though, because no criminal charges
have been brought. There has been no explanation, either, of why Pakistan is
holding Saeed, other than that it is in national interest.

It probably isn’t a coincidence, though,
that the action against Saeed came on the eve of a meeting, last month, of the
Financial Action Task Force (FATF) — a multi-nation body made up of 36 members
from developed countries, and eight regional bodies which mirror its work.

The FATF’s Paris plenary meeting, held from
February 19-24, is believed to have given Pakistan another 90 days to act
against the finances of terrorist groups like the Jama’at-ud-Dawa. Failing to
do so could, potentially, lead to the country being placed on a black list that
could raise the costs of interacting with the global financial system: trade,
remittances, loans, bilateral and multilateral aid.

Two years ago, the country had bought time
to avoid this outcome. In a February 2015 statement, the FATF said it had
removed Pakistan from a list of nations which were subject to ongoing
monitoring, saying the country had “established the legal and regulatory
framework to meet commitments in its action plan regarding the strategic
deficiencies that the FATF had identified in June 2010”.

The FATF statement, however, noted that
Pakistan was obliged to continue working with its Asia-Pacific Group, “as it
continues to address the full range of AML/CFT (Anti-Money Laundering/
Countering Financing of Terrorism) issues identified in its mutual evaluation
report, in particular, fully implementing UNSC Resolution 1267.”

But in 2015-16, diplomatic sources say,
Pakistan conspicuously failed to comply with its commitment to implement
Resolution 1267, which obliges countries to freeze all financial assets that
could aid listed entities.

Earlier this year, an Indian Express
investigation showed that the Jama’at-ud-Dawa’s charitable arm, the
Falah-i-Insaniat foundation, was raising funds for the organisation through
proxy bank accounts, which it openly advertised through Facebook— with no
action from Pakistani police authorities.

The issue in fact dates back to 2011, when
Pakistan almost ended up in serious trouble with the FATF because of its
failure to enact appropriate anti-money laundering and terror financing
legislation. Though there was substantial resistance to action against the
Jama’at-ud-Dawa, Pakistan’s financial establishment made clear that the
opposition would come at a considerable cost.

Following protracted wrangles, Pakistan’s
National Counter-Terrorism Authority (NACTA) released a list of banned
organisations in December 2014. The Jama’at-ud-Dawa was listed as having
been “under observation” since 2007, while the Falah-i-Insaniat Foundation
was not mentioned.

Then, following a demand from former US
secretary of state John Kerry, an amended list of banned organisations was
released, which showed the Falah-i-Insaniat Foundation and
Jama’at-ud-Dawa as having been proscribed — not placed under watch — in March,
2012, and December, 2008, respectively.

But the list disappeared, along with
NACTA’s entire website. A series of contradictory statements followed, with
Pakistan’s then defence minister insisting there was no reason to ban the Jama’at-ud-Dawa,
while the Foreign Office insisting that it indeed had been banned. Saeed
himself put the issue to rest days later, leading a rally in Karachi.

Now, NACTA’s latest list says the Lashkar-e-Toiba
has been banned since 2002, but the Jama’at-ud-Dawa and Falah-i-InsaniatFoundation are listed as having been placed on a watch-list only in
January this year. There is no mention of the earlier listings, nor reference
to any legal proceedings that might have followed from them.

What might Pakistan hope to achieve through
what is, after all, a not particularly cunning charade? The answer might well
be: time. For all its effusive talk on China, Pakistan still remains critically
dependent on Western economies. Pakistan’s biggest export destinations are, in
descending order, the United States ($3.6 billion), China ($2.8 billion),
Afghanistan ($2.2 billion), Germany ($1.7 billion) and the United Kingdom ($1.7
billion). The United States is planning to triple aid to Pakistan this
financial to $900 million, but half of that will be contingent on military
action against its jihadist proxies, the Haqqani Network; $300 million promised
last year was not disbursed since the action never materialised.

Even though the China-Pakistan Economic
Corridor promises a staggering $51 billion, much of that is to come from private
corporations, and may thus never materialise; it is, moreover, long-term
funding, which is no substitute for badly-needed short term aid.

Put simply, Pakistan needs to stay on the
right side of the United States — and with President Donald Trump in office,
may well fear that the long leash it enjoyed might finally have run out.
Seeking an exit from Afghanistan, Islamabad fears, Trump might just be willing
to ratchet up the pain on Pakistan to levels past administrations were
unwilling to countenance for fear of losing influence with the nuclear-armed
state.

This is good news for India: fear of
Western sanctions will compel Pakistan to restrain its jihadist proxies and
that will give New Delhi some breathing space along the Line of Control and in
Kashmir. This breathing space will not, however, be infinite. The
Lashkar-e-Toiba’s rebirth after 26/11 is, after all, a cautionary tale: the men
who bred this dragon have shown themselves to be skilled in the art of raising
its spawn from the ashes, again and again.